Take loan, good credit score and paper work at low interest in lieu of FD, know the process

Suddenly We first consider taking a personal loan when the money is needed. But apart from this, there are many options. You can easily take a loan at a lower interest from a personal loan in lieu of your FD, mutual fund investment, gold. Today we are telling you the benefits and process of loan instead of FD.

What is the process of taking a loan in lieu of FD?

When you take a loan on FD, the bank uses your FD as collateral. You can take loans from 75% to 90% of the amount deposited in FD. Interest is received on FD, and interest on loan is usually 1-2% higher than your FD interest rate.

What are the benefits of taking a loan on FD?

The biggest advantage of the loan on FD is that it is a secured loan, so you do not need good credit scores or more documents. It is immediately approved in a few hours, and if you pay on time you do not have to lose your FD or interest on it. There is no pre-paying punishment in this, and you can use this amount wherever you want.

Also know

If you are unable to pay the loan taken in lieu of FD on time, then the bank can redeem your FD and withdraw the amount. Also, if the interest rate on your FD is already lower, the interest rate saved on personal loans may not work. For long periods or large loans, better options can be available elsewhere. In addition, if you have to withdraw FD ahead of time to repay the loan, the withdrawal fee may be levied ahead of time.

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